According to Forbes magazine, Robinhood headquarters, co-founders Vlad Tenev and Baiju Bhatt are no longer dollar billionaires. The shares of their stock trading application have been steadily declining in recent months, and the company has lost more than half its value since last year’s listing.
Robinhood entered the stock market for considerable fanfare in July 2021 with a valuation of 32 billion dollars. While the shares closed on the first day of trading with an 8 percent drop from an IPO price of $ 38 (over $ 800) per share, Robinhood’s public offering earned a package for its two founders and increased their net worth to more than $ 2 billion each.
Robinhood headquarters has a large number of customers, but the inexperienced
According to Forbes magazine, the pair first became billionaires in September 2020 after a private round of funding valued Robinhood at $ 11.7 billion. Nevertheless, the company has a large number of user accounts, of which there are a total of 22.4 million.
The current sales in the markets are not very good for inexperienced traders, who make up more than half of Robinhood’s accounts – more than half of the total number of active accounts is the investor’s first account.
Robinhood shares are one of the most paid for the current sales of technology titles. They have written off almost a third of the value since the beginning of the year. Compared to the historical maximum, even around 85 percent of the market capitalization.
The critical date will be Thursday, January 27, when Robinhood will announce its fourth-quarter and full-year results. The company hopes to do better than last year when shares fell 10 percent after third-quarter earnings far exceeded expectations.
In the latest Robinhood results report, revenue fell from $ 565 million in the second quarter to $ 365 million, primarily due to a sharp drop in revenue from the cryptocurrency trading Robinhood platform.
A decline can be expected in the future as well
After a hit in 2021 – when a savage rally on meme stocks like GameStop and cryptocurrencies like Dogecoin helped kick-start the massive growth of Robinhood – the company’s business activity calmed down considerably. In October, the company warned that lower retail business activity “may persist” and negatively affect fourth-quarter profit.
Many small investors have probably burned with the current decline in cryptocurrencies and stocks, discouraging them from further trading on this platform. For the platform, this means lower expected sales in the future – which is also reflected in sales of Robinhoho’s stock itself, which is more than 80 percent lower since its August high. At the same time, the outlook is not very optimistic, given that there will also be a reduction in business activity on the platform.
We cannot currently label Robinhood shares as ‘buy.’ Investors can expect further volatility here, and the purchase of this share would be very speculative. However, the current low capitalization may be interesting for a possible takeover by some US banks. For them, the acquisition of Robinhood may make sense given the broad client base and trading data.